The Price of Influence: Why People Don't Buy Your Ideas with Claire Wang

0:00Practice some perspective taking. Try to train yourself to see things from others' perspective and you will really gain a lot. It will really help you to be more effective at what you do. Coffee's for closers on. So we've established my proposal to stand in principle. Now we're just haggling over price. Let's see how much we're going for an eBay. It's the same as Dunkin' Donuts, cost 15 times the price.

0:30Today's podcast is sponsored by Jennings Executive Search. I had a great conversation with John Jennings about the skills needed in different pricing roles. He and I think a lot alike. If you're looking for a new pricing role, or if you're trying to hire just the right pricing person, I strongly suggest you reach out to Jennings Executive Search. They specialize in placing pricing people. Say that three times fast. Welcome to Impact Pricing, the podcast where we discuss pricing, value, and how buyers decide. I'm Mark Steiving. Our guest today is Claire Wang. Here are three things you want to know about Claire before we start.

1:11She is a pricing strategist, speaker, and author. She is passionate about shaping willingness to pay and helping companies better understand how buyers perceive value. And she has a book coming out in September, The Price of Influence. Welcome, Claire. Thank you, Mark. Thanks for having me. That's going to be fun. I'm sure you said this once before, but tell us all how you got into pricing. Well, like most people, I didn't actively choose the pricing profession. I was kind of just, you know, okay, long story short, I studied actuarial and as an actuary, there were really two career paths. You either do pricing or you do valuation.

1:53So on my first day, I joined an insurance company in Australia, and my boss came to me, and he went, Claire, you're going to be our pricing girl. And that's how it started. Although, I have to add, even though I did not choose the pricing career, I did continue to choose to stay. So that's what made the difference. Yeah, what's interesting is that it was your very first job, which is pretty rare, actually. That doesn't happen to very many people. And in fact, it's hard to understand the power of pricing until you've done other jobs. So it's pretty cool that you stayed. Excellent. So we're going to talk.

2:32Well, first off, tell me about the new book, because we talked a little bit beforehand, and then I had to stop you because I wanted everybody else to be able to hear this too. So what is your thinking on the new book? Why do I need another pricing book? Oh, my gosh. No, just joking. Just joking. Go ahead. Well, firstly, it is not a pricing book. So for all the pricing people out there, if you're ever interested in reading something slightly different, then this might be the book you will be interested in. I started writing this book because I wanted pricing to be known by more people. And I kind of came down to this conclusion that the reason pricing is not more known outside of the pricing niche is because we don't talk enough about pricing.

3:19And sometimes it's not just like the frequency. Sometimes it's also like the way we talk about our work. I felt, you know, perhaps we were just sort of like brought up in a very analytical way of thinking. We tend to think that when we have logic, the idea sells itself. Well, unfortunately, it doesn't. It never has. So this book is all about how can we use pricing framework and sell our ideas more effectively so that we can get more influence at workplace. Okay, that sounds really interesting. It drives two really big questions for me. First off, why do you care if more people know about pricing?

3:58I mean, I find it hilarious that I tell people I'm a pricing expert and they're like, what do you do? Why do you care? Well, I guess, you know, I love pricing. You know, my entire career has been built in pricing. And every time I go to dinner parties, I'm surprised to find that very often I'm the first pricer they have encountered. And Mark, you and I, we both know this number really well, right? You know, pricing is the most effective lever a corporate can pull if they want to achieve profitability. But outside of the pricing world, people don't know about this. You know, they still focus on volume.

4:39They still talk about cutting cost when they have something out there that they can really use. So I just feel like more people should know about this. And it kind of annoyed me that, you know, we are not more popular than we are right now. I just find that funny because it never bothered me that more people didn't know about it. It did bother me that more companies don't pay attention to it. Yeah. but not the more people don't know about it. Okay, so I love this aspect that says we're going to use pricing frameworks to teach people how to influence others. So you've got to give me an example.

5:15Sure. Okay. So in the book, the core idea is that your idea is like the product and the person you need a yes from is your customers. So, you know, using pricing framework, then we would know the most effective way to get people to buy your product is for them to see the value. So exactly the same principle can apply when it comes to selling your idea and get a yes. Your job is really to make sure the person you are speaking to can see the full value of your product. And sometimes it might not be so obvious, you know, initially. So there's a sort of like iteration process where you refine and through this understanding of your audience, understanding of what their needs are, you can go back to your idea and fine tune.

6:04So, you know, when you come out the end, your idea becomes a co-creation. And it's kind of very similar to the pricing process where outside of pricing, people think our job is really just to put a number on a tag. But, you know, that's not what we do, right? That number is really just the final output when you go through this rigorous process where you tick all the boxes. So it becomes a natural byproduct. And I think that works with influence as well. When you truly understand your audience, you understand their needs, you understand their hesitation, then getting a yes is almost inevitable.

6:42Okay, let me share something with you, if I may. I'm writing another book, of course, I can't stop. But one of the things that I realized as I was writing this new book is that all buying is a prediction of the future. So every time I buy something, I can. Every time anybody buys something, what they're doing is they're saying, hey, if I buy this, how does my world change? Right? Am I going to be prettier? Am I going to be smarter? Am I going to be richer? Am I going to be, you know, people are going to like me more, right? How's my world change? and every time I buy something, I'm projecting, I buy a Snickers bar because I want my stomach to feel better, right?

7:21Everything is a prediction of the future. And then I stepped back and I said, you know what? Every single decision that we make is a prediction of the future. It doesn't matter if it's buying or not buying. And the reason I bring that up is because it's exactly what you're saying. It's that, you know, instead of saying, hey, buying is a prediction of the future. It's like, you're going to make this decision. Are you going to adopt my framework, my ideas? And in order to get you to adopt it, you're going to make a decision. And so does this fit in your future? So it's absolutely the exact same thing.

7:59It is, because when you think about it, right? Like in pricing, our job is try to get customers to buy something. But that decision-making is essentially, you know, the same with any decision-making process. And people are selfish. When you try to sell me something, the only thing I care about, you know, as people say, wealth, health, relationship. You know, if it ticks one of those boxes, I'm interested. If it doesn't, I'm not interested. So you need to show me upfront what's in it for me. And only if you can do that, I start paying attention. Okay, so whether we're talking about products or whether we're talking about ideas, we want to communicate value.

8:40And I find this probably the most fascinating thing of all the things that we do because so few people understand value, understand how to communicate and how to get people to understand it themselves. So what are some tricks or some ideas or thoughts you have on how to help people communicate value? Or maybe what value is? Let's start with that. What's value? That's a very good question. I would say value is something that's unique about an idea that only you can deliver. So when we talk about value, it links to, you know, previously we've discussed about if I say yes to this idea, am I going to gain reputation, gain more health, gain more money or improve my relationship?

9:28So if your promise can deliver on that, then you are adding value. that value is the benefits you get on utilizing something. So how do we, I guess, find out about value and articulate value? I think it all comes down to, you know, have this sort of like comes down to listening, really. A big part I talk about in this book is about empathy because I feel like empathy is almost like the foundation of everything. And empathy, you know, like the definition is the ability to see things from another perspective. And only if we can do that, we can start to see what the other person values. And it is quite an interesting topic.

10:12And, you know, every time I think about it, it fascinates me because as a pricer, we don't always price things we buy. You know, like let's say if you work in a five-star hotel, I don't know about you, Mark, but I come from middle-class family. When we went on holiday, we never stayed at a five-star hotel. So if I have to price for a product like that, then I really need to, I mean, fortunately, I just stay in some five-star hotel when I get work. But let's say for someone who just never had experience staying at a five-star hotel and having to do pricing, how does that person know what a customer who would book a five-star hotel value?

10:52So you need to really get that. If you can't get that through your own experience, you need to get that through research. And that's just one example. A lot of the things we price, we are not the end customers. So for us to do our job well, we really need to develop this perspective to see things in another way. Yes, I love the word empathy. I rarely use that word. In fact, I don't know if I've ever used that word in any of my work. But I'll tell you how I define value and it correlates perfectly with what you just said. And that is, I define value as the result of solving problems. Yeah, I love that.

11:31And so problems are the empathy part, right? Do I understand what your problems are that you want to go solve? Or do I want to, you know, someone's going to buy a Maserati, never owned one, never going to own one, right? But if I were pricing a Maserati, I want to know what are the problems someone buying a Maserati cares about, right? I like your definition. It's definitely a lot neater than mine. Well, I like it because it's actionable in the sense that I can help you try to figure out what are the problems. So yeah, I like that. I'm gonna steal that. Feel free, feel free. And so how do we, one of the things we started talking about, or at least the reason we got on this call, we were gonna talk about shaping willingness to pay.

12:15And so we start thinking about value. How is it that we can shape somebody's willingness to pay? Well, actually, before I ask that, let me ask a different question. Sure. Describe to me how you perceive willingness to pay. Is it a number that someone has or is it a thought process that we achieve? What do you think of when you think of willingness to pay? If I think about it in a pure pricing term, then I would think it's a number. Simple as that. When you offer someone a product or a service, how much am I willing to pay for that? and above what price point I start thinking this is too expensive, I will never consider, or below which point I would start doubting the quality of your product or services.

13:01So I think, you know, like shipping willingness to pay, it's kind of like the way I see pricing, which is more holistic. Because, you know, if you talk to a product manager, then they will say, all right, we are the one who's in charge of designing a product. And then after we've had this product, then we involve pricing to set a price. But in my view, that is not the right approach. A good product design process should always be having pricing people involved early on, because then we can tell you whether your feature has monetization power. And if it doesn't, then you should drop it. And it is through that process we can improve the willingness to pay, because we will tell you, feature one, you can sell.

13:45Feature two, you can sell. Feature three, it's good to have. Maybe you should drop it. And, you know, in order to do that, you just have to go through this entire process. And then after you have a product, when it comes to pricing communication, exactly the same thing. Some people outsource that entirely to sales. But I think pricing should be involved in that process as well, because if the sales cannot fully articulate the value in a service or a product, then you will not move willingness to pay. So willingness to pay, I would rather see that as this entire customer journey where every touch point you have the ability to add value.

14:25Yeah, so I agree with almost everything you said, with the exception of how you started off, and that is the willingness to pay as a number. I'm going to say it differently in this. Eventually a buyer's willingness to pay is either above or below our price, right? So they buy or they don't buy. But all along the way, they're building up a willingness to pay. They're trying to say, you know, as I learn more about the product, I'm not sitting there saying, oh, now it goes from$3 to$4. But what's really happening is I'm building up my understanding of value. So without them knowing it, we're actually growing or shaping their willingness to pay.

15:03So this happens with our product features that we add. This happens with our marketing. It happens with our sales. So it happens with almost every customer interaction. We are influencing a buyer's willingness to pay. Yeah. So in a way, what you're saying is, you know, we are improving the awareness of the customers. So I guess it's the pricing articulation or value articulation part that we've been discussing. And I agree with you 100%. You know, sometimes people don't see the value, not because there's no value, but simply because they don't have full information to make the summer judgment.

15:42So that's absolutely right, because nobody knows everything about our products, our offers, whatever it is we're doing. And so they're making estimates. And in fact, let's just take it to the next step. Remember earlier we said that all buying is a prediction of the future. What they're doing is they're predicting their future based on what they know about our future. product, our features, our capabilities. And of course, we know that people aren't very good at predicting the future. They can only predict what they have already experienced, right? Which is very difficult for someone to predict something they have never experienced.

16:18Yeah, that's absolutely true. And so how is it that we influence that, right? That's the real trick is how do we shape their willingness to pay? We shape it by helping them understand the value or helping them picture their future. Yeah, paint the picture, as I always say. I feel sometimes when you describe things in an abstract term, it's very difficult for people to imagine what it feels like to be using this product or service. But if you can really paint a picture, describe a thing, almost like using storytelling, then it becomes much easier for people to grasp what you've been describing.

16:55Yeah. So how do you think pricing people should or could work with marketing or sales to help them communicate value better? What's that relationship look like? I think I will go back to empathy. And, you know, I don't want to offend any present people, but sometimes I do feel present people like to think they are the smartest people in their room. And for that reason, whatever marketing or salespeople suggest, you know, they might have this sort of like assumption that I'm right, you are wrong. And I think for us to really work together, it is to drop any of those assumptions and listen to what they've got to say.

17:38Because, you know, they are the one out there talking to people and there is some value of getting real customer feedback. And I think that's probably the first thing is to start from listen to understand, not listen to reply. And the second part, and I did this early on in my career, is to really try to, you know, work in those departments. So I remember in my 20s, I was in this design thinking project. I was working with the product and sales team trying to use the design thinking process. And that was a very useful project because you really got to see how customers think and utilize the product.

18:16And I think if you've never had this chance to work in a different department, try to, you know, put your hands up with a second or, you know, like shadowing someone doing their work. It's very helpful to just to develop that ability to see things from another perspective. So I have two things I want to say about this. First off, early in my career, when I'm in, I don't care what role it is, it's so easy to look at other people's roles and say, oh, they don't know what they're doing. Right. They have no idea. and until I started running companies, then it's like, well, everybody matters. Everybody's important.

18:49You got to pay attention to all of them. So I thought that was pretty funny. And then another thing I learned early in life, which goes along with what you just said, is for pricing people especially, but those of us who are very logic-driven and think we're really smart, the thing I learned, one of my mentors taught me once, is do you want to be right or do you want to be effective? and those are two very different things yeah exactly and sometimes they can coexist i think what you are really trying to say is do you want everyone to know that you are right or do you just want to be effective because there's a difference you can be right and be effective you don't need to announce to the world that i'm right but sometimes you know we might feel the need to make sure people know we are right.

19:40And I think that's when communication starts to break down or that's when people start to think that, yeah, you're a little bit difficult to work with. Yeah. I think that's one half of it. And the other half that I think of a lot is I may have an idea and think it's the right idea, but I can get everybody else to go along with a different idea and that will work. So let's go make it work, right? It doesn't have to be my idea. So it was hard to learn all that. Yeah. Let go of your ego, right? which is the difficult part. Exactly. We all have to learn that. So let me switch gears real quickly. How are you using AI?

20:17Well, I wouldn't consider myself like the most smartest person using AI. I use Cloud. I pretty much switch everything to Cloud these days and I train that by I set up different projects. For each of my projects, I will fit the requirement, like the objective, how I expect my AI to respond to me, all the background documentation. So depending on what I'm doing, I will switch between different projects. That's pretty much it. I use it mainly for brainstorming. I would intentionally ask AI to be my aspiring partner, challenge me, point out to my blind spots. I find that very effective, very open.

20:59I got to see things in ways that I've never really thought of before. Yeah, I like that. But probably my favorite thing is the brainstorming part because it helps me think things I had never thought before. And so I find that hugely valuable. Yeah. But I wish I could do sort of more just, you know how everyone's like building their own AI agent these days. It's just something I haven't really invested enough time. But that's something I would love to do. Sort of like replicate myself so I can do more things. Yeah, I don't know. There's this thing called vibe coding that I don't know how to do.

21:31A lot of people do. A lot of my friends do. but I don't know what I would do with it. That's the problem. I mean, what am I going to do? What am I going to create? So it doesn't... Yeah, I think that's the problem with AI, not just like, you know, between you and me. It's like, I think the main issue with even like corporation is you've got AI, but what are we going to get them to do? And it's this problem identification part that's tricky because once you know what to do, then it becomes a lot easier. And I share, you know, your struggle as well. Sometimes I wish to ultimate something. But a lot of the things I do, you know, I don't see myself having to repeat that again.

22:08So spending the time to ultimate something, all of a sudden, it doesn't really make a lot of sense. So I'm also trying to figure out what makes sense to outsource to AI and what sort of things make sense to just do it myself. So can we tie this back to what we were talking about earlier, and that's what is value? And so what I find fascinating about this whole AI problem is AI can't communicate their value to us because we don't have a specific problem we want to go solve. Essentially, AI is like, here's a tool. What do you want to go do with it? Go play with it. And that's why it's not as, that's why it's not that expensive.

22:44I'm going to put it that way, right? I pay less for Claude than I pay for, you know, a lot of my software. And yet Claude gives me so much more value. it's because they can't articulate that value and charge for that value. Yeah, it's interesting you say that because, you know, again, I tie everything back to pricing because I just see everything sort of linked to the pricing principle. Let's just take a product, right? How much the product is worth? In many ways, it depends on who you are, you know, and what sort of context you are in. And I mean, we talk about water all the time, you know, I can get this from the tech, it's free.

23:20And if I put some guests and I pay a little bit more, and if I'm ordering this at a hotel minibar, then I will pay even more than that. But it's the same thing. But depending on the complex I am in, I'm willing to pay different things. And I think that applies to how you use this different software. And depending on what you use the software for, then it can give you very different outcomes that might drive the value behind the software. Absolutely right. Absolutely. You're right. Claire, we are running out of time, but let me ask you the final question just so we can wrap this up. What is one piece of pricing advice you'd give our listeners that you think could have a big impact on their business?

24:01Develop your empathy. Try to practice some perspective taking. Try to train yourself to see things from others' perspective, and you will really gain a lot. It will really help you to be more effective at what you do. I think that's actually really, really smart. I like that answer a lot. So, Claire, thank you so much for your time today. If anybody wants to contact you, how can they do that? LinkedIn would be the easiest way. Claire Wong, or, you know, I have a book coming out in September. If you're just typing on Google, The Price of Influence, Claire Wong, then you will see me as well. Excellent.

24:42And to our listeners, thank you for your time. If you enjoyed this, would you please leave us a rating and a review? And finally, if you have any questions or comments about the podcast, or if you want to get paid for value your buyers can't see, email me, mark at impactpricing.com. Now, go make an impact. Thanks again to Jennings Executive Search for sponsoring our podcast. If you're looking to hire someone in pricing, I suggest you contact someone who knows pricing people. Contact Jennings Executive Search.

25:17We'll be right back.